South Africa: Nersa tariff increase overturned

Adding a further layer of complexity to Eskom’s finances is a ruling by High Court judge Cynthia Pretorius on 16 August in a judicial review of the decision by the National Energy Regulator of South Africa (Nersa) on 1 March 2016 to let the utility recoup a regulatory clearing account (RCA) balance of R11.2bn ($781m) through a tariff increase of 9.4% for standard customers in 2016-17. The RCA is a mechanism to reduce the risk of Eskom generating either excessive or inadequate returns as a result of unexpected costs or changes in the macroeconomic environment.